A look at the seasonal patterns for May 2020:
Welcome to May.
The scoreboard is wiped clean again in the new month and I would emphasize that this is not a good time for seasonal investing. However if the seasonals lineup with the techs and fundamentals, they can add to a great trade.
Here’s the rundown:
1) Dollar days are back
May is the best month for the dollar over the past decade. The trade weighted Bloomberg dollar index was up in 8 of the past 9 months of May. The average of +1.53% over the past decade is easily the best of any month. It’s the same story in the Dollar Index, if that’s your bag.
2) AUD unwinds
3) Switzerland blooms
I imagine that Switzerland is a beautiful place in May and the trend is for strength in CHF in the month. On average, it’s the strongest month over the past decade for the franc against the US dollar. However I would caution that it’s fallen 3 years in a row coming into 2020.
4) Euro struggles
May is the worst month for the euro against the dollar but that’s not all. It’s also a poor month vs GBP and CHF. Over the past decade, the average decline in EUR/USD in the month is 1.76%, including declines in 8 of the past 9 years.